Down-sized North Coast wine grape crop offers growers an upside

Down-sized North Coast wine grape crop offers growers an upside

“Overall, yields in Napa and Sonoma counties this year are roughly 10 percent to 15 percent below normal, if there is such a thing as normal.”

By the end of October, when California’s North Coast wine grape is expected to conclude, growers are likely to bring in their lightest crop in the last four years. In fact, it’s shaping up to be smaller than many had been anticipating earlier in the year.

The amount of shortfall began to become apparent in August as the harvest started and growers and wineries were reporting yields of sparkling varieties down as much as 20 percent or more from average, in some cases, reports Brian Clements, vice president of Turrentine Brokerage, based in Novato, Calif. The downturn continued throughout the harvest.

“Overall, yields in Napa and Sonoma counties this year are roughly 10 percent to 15 percent below normal, if there is such a thing as normal,” he says. 

While that has reduced grower returns, the outcome could have been worse, at least for growers seeking to sell uncontracted tonnage, Clements notes. It’s helped prop up prices of certain varieties as wineries turned to the spot market to make up for the drop in expected deliveries.

“Mother Nature stepped in to stabilize grape prices this year at levels which should be profitable for most growers and wineries in the North Coast,” he says. “Had this been a big crop, spot market prices for just about all varieties would be severely depressed in view of the inventories wineries have from the large crops of the past three years and the amount of bulk wine actively for sale.”

Clements’ list of North Coast varieties benefiting from the lower-than-average size of the 2015 crop include Chardonnay, Merlot, Pinot Noir, Sauvignon Blanc and Zinfandel.

Only one variety has resisted any downward pressure on price, he notes – Cabernet Sauvignon. “Its price has remained nearly bullet-proof in Napa and Sonoma counties for at least the past four years,” Clements says.

 In his view, growers whose contracts with wineries expire this year also stand to benefit from the smaller 2015 North Coast grape harvest. Most of the grapes grown in this region are made into higher-end wines, those selling for more than $10 a bottle. Despite the amount of bulk wine on the market, sales of the higher-end wines continue to grow, Clements explains. That helps strengthen winery confidence in their ability to sell these wines.

“If case sales from October through December for this year’s holiday season, the wineries’ biggest market of the year, meet expectations, it should mean continued profitable prices for growers signing contracts next year for most varieties.” Clements says.

Right now, such prospects look promising, he adds. “Wineries are already expressing interest in 2016 North Coast Cabernet Sauvignon, Chardonnay and Pinot Noir grapes. That doesn’t mean prices will actually increase next year. But, at least the wineries are willing to discuss it now.  That’s usually a good sign.”

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